What Is Medicare Supplement Insurance & How Does It Work?

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Russell Noga
by Russell Noga | Updated August 14th, 2023

What Is Medicare Supplement Insurance & How Does It WorkOriginal Medicare Parts A & B are essential healthcare insurance policies the Federal government offers.

If you’re 65 or older, you qualify for Medicare. Part A & B Medicare policies only cover 80% of hospital and medical costs, and you’ll need a Medigap plan to cover the remaining 20% of out-of-pocket expenses.

Understanding how Medigap works can be confusing for many seniors. With ten plans available, how do you know which one is the right option for your healthcare requirements?

How does Medicare supplement insurance work, and what does it cost? Who offers Medigap plans in your state, and how do you enroll?


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Understanding the Different Medicare Supplement Insurance Plans

There are ten Medigap Plans, each offering different coverage to suit your healthcare requirements. For instance, there are options like Plan A, B, D, K, L, & M for seniors on a budget. These plans have limited benefits or implement cost-sharing models to keep monthly premiums low.

Plans F & G are fully or near comprehensive. They cover all out-of-pocket costs associated with Original Medicare Parts A & B. The difference is that Plan G doesn’t cover the Part B deductible. However, it has more affordable premiums than Plan F. These savings offset the cost of the Part B deductible over your annual premiums.

Understanding the Different Medicare Supplement Insurance PlansPlan N is a good choice for healthy seniors. If not admitted into the hospital, you make a $50 copayment at the emergency room and a $20 copayment at the doctor. You’ll also have to pay Part B excess charges when using practitioner charging more than Medicare Assignment rates. However, you get good coverage for Part A & B expenses and low monthly premiums.

Plan F & G also come in high-deductible versions. These plans increase the Part A deductible from $1,600 to $2,700, but the monthly premiums are 75% to 80% cheaper than the standard plans, and you retain all the same benefits in a medical emergency.

Understanding Medicare Supplement Insurance Benefits

The ten Medigap plans offer different benefits and coverage levels for the out-of-pocket expenses involved with Medicare Parts A & B. The Federal government standardizes the benefits in each plan, ensuring all providers offer the same coverage from all Medigap providers.


What Medicare Supplement Plans Does GPM Offer-MEDIGAP


Essentially, buying a Plan N policy from Mutual of Omaha has the same benefits as a Plan N policy from Humana or Blue Cross Blue Shield. All Medigap plans offer the following benefits.

  • Part A coinsurance and hospital costs for up to 365 days after using up Medicare benefits.
  • Part A hospice care coinsurance or copayment.
  • Part B coinsurance or copayment.
  • Blood transfusion costs for the first three pints of blood.

What Is Medicare Supplement Insurance & How Does It Work?

Plans F*, G, and N offer additional Medicare Parts A & B benefits.

  • Part A deductible.
  • Part B excess charges (Plan N doesn’t cover these charges).
  • Skilled nursing facility care coinsurance.
  • 80% of emergency healthcare costs when traveling outside the US for 60 days. ($250 deductible and $50,000 maximum apply).
  • Unlimited coverage for all out-of-pocket costs.

*Plan F is only available for seniors eligible for Medicare before January 2020. If you qualify after this date, you’ll have to look at Plan G. Plan G has the same coverage as Plan F, but you must pay the Part B deductible of $226 in 2023.

Medigap policies don’t cover medical expenses unrelated to Original Medicare parts A & B. That means you don’t have coverage for private duty nursing, stays at nursing homes, or visits to the chiropractor, acupuncture therapist, or physiotherapist. Medicare might pay for these costs in cases where they relate to your hospital care or recovery from procedures in hospitals.

Medicare also doesn’t pay for vision, hearing, and dental services. If Medicare doesn’t pay, Medigap won’t cover it. Medigap policies only cover the out-of-pocket expenses left unpaid by Medicare Parts A & B.

However, Medigap is a competitive industry. As a result, some providers offer add-on policies for vision, hearing, and dental. Or they’ll give you discounted rates on these services if you use their in-network partners.

Medicare and Medigap don’t cover the cost of prescriptions. However, you can sign up with Medicare Part D to cover these costs.

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Understanding Medicare Supplement Insurance Providers & Premiums

Unlike Original Medicare Parts A & B, private healthcare insurers like UnitedHealthcare and Mutual of Omaha sell Medigap policies. These companies must follow the Federal guidelines surrounding the standardized benefits offered in Medigap plans.

However, they are free to charge whatever they want for their policies. As a result, some providers are more expensive than others for Medigap plans. For instance, Allstate might be the cheapest option for Plan G in your state, and Aetna is the most expensive.

However, Mutual of Omaha might be the most expensive option for Plan G but the most affordable option for Plan N. A Medigap agent can help you source the lowest premium for any Medigap plan in your state.

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Understanding Medicare Supplement Insurance Enrollment

A Medicare Supplement Insurance Agency Guides You Through EnrollmentThe Medigap “Open Enrollment” period starts on the day of your 65th birthday and runs for six months from this date. You can sign up for the Medigap plan with any insurer offering a Medigap scheme during this time.

If you have a pre-existing health condition, like diabetes or high blood pressure, the insurer cannot refuse our application. They also can’t charge you a higher-than-average monthly premium because of your chronic health disorder.

The insurer may institute a three to six-month waiting period before activating your benefits, and you’ll have to pay your premiums during this time. However, the insurer will conduct medical underwriting on your application if you apply outside the open enrollment period. If you have pre-existing conditions, the insurer may charge a higher-than-average premium or deny your application to join the Medigap scheme.

“special guarantee issue rights” pertain to some individuals joining outside the open enrollment period. For instance, if you leave your employer’s healthcare scheme or revert back to Medigap from a Medicare Advantage plan in the first year of your policy. There are several other guaranteed issue rights, and a Medigap agent can help you understand how they apply to your situation.


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Frequently Asked Questions

What is Medicare Supplement Insurance?

Medicare Supplement Insurance, also known as Medigap, is a type of private health insurance that helps cover the gaps in Original Medicare (Part A and Part B) coverage. It helps pay for out-of-pocket expenses such as deductibles, coinsurance, and copayments.


How does Medicare Supplement Insurance work?

Medicare Supplement Insurance works alongside Original Medicare. When you have a Medicare-covered service, Original Medicare pays its share first, and then your Medicare Supplement plan pays its share, depending on the coverage provided by the plan.


What does Medicare Supplement Insurance cover?

Medicare Supplement Insurance covers various out-of-pocket costs not covered by Original Medicare, such as deductibles, coinsurance, and copayments. Some plans may also provide coverage for foreign travel emergency care and other additional benefits.


What is the difference between Medicare Plan G and Plan N?

Medicare Plan G and Plan N are both popular Medigap plans. Medigap Plan G offers comprehensive coverage, including coverage for Medicare Part A and Part B deductibles. Plan N has cost-sharing requirements, such as copayments for certain services. The difference in coverage helps determine the cost difference between the two plans.


How do I enroll in Medicare Supplement Insurance?

To enroll in Medicare Supplement Insurance, you need to be enrolled in Original Medicare (Part A and Part B) first. Once you have Original Medicare, you can apply for a Medicare Supplement plan directly through insurance companies or licensed insurance agents.


When can I enroll in Medicare Supplement Insurance?

The best time to enroll in Medicare Supplement Insurance is during your Medigap Open Enrollment Period. This period starts on the first day of the month in which you turn 65 and are enrolled in Medicare Part B. During this period, you have guaranteed issue rights, meaning insurance companies cannot deny you coverage or charge you higher premiums based on your health condition.


Can I switch Medicare Supplement plans?

Yes, you can switch Medicare Supplement plans at any time, but it may be subject to medical underwriting if you are outside your Medigap Open Enrollment Period. It’s advisable to compare plan options, coverage, and premiums before making a switch to ensure it aligns with your healthcare needs.


Is Medicare Supplement Insurance the same as Medicare Advantage?

No, Medicare Supplement Insurance and Medicare Advantage are different. Medicare Supplement Insurance works alongside Original Medicare and helps cover out-of-pocket costs. Medicare Advantage replaces Original Medicare and provides Medicare Part A, Part B, and often additional benefits through a private insurance plan.


Are prescription drugs covered by Medicare Supplement Insurance?

No, prescription drugs are not covered by Medicare Supplement Insurance. To get prescription drug coverage, you need to enroll in a stand-alone Medicare Part D Prescription Drug Plan or choose a Medicare Advantage plan that includes prescription drug coverage.


Where can I find more information about Medicare Supplement Insurance?

Call us today for more information at 1-888-891-0229.


Get a Free Consultation & Quote on Medicare Supplement Insurance

If you need further assistance understanding how Medicare supplement insurance works, call our team at 1-888-891-0229. Our fully-licensed Medigap specialists offer you a free consultation and quote on any Medigap plan.

We’ll help you find the right Medigap policy to suit your healthcare requirements, with the best premiums in your state. Alternatively, complete the contact form on this site, and we’ll get an agent to connect with you.

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